The viability of 5G fixed wireless and mobile substitution are possibly the biggest wild cards in the U.S. fixed network internet access business. For the most part, where telcos and other internet service providers have fiber-to-premises networks, market share of about 50 percent for the telco is possible, with cable TV operator share capped at about 50 percent.
Projections will therefore be highly sensitive to possible market share shifts to fixed wireless or mobile substitution.
Internet access market share in the U.S. fixed network markets is becoming a “haves and have-nots” issue. Where telcos and other internet service providers operate fiber-to-premises networks, they will tend to get half the market.
Telcos only able to use digital subscriber line might be lucky to retain 27 percent market share, MoffettNathanson argues.
“We expect there to be no meaningful functional difference, at least to end users, between FTTH and cable’s DOCSIS 3.1 and, soon, DOCSIS 4.0, offerings,” the firm believes. “In short, there is no longer a reason to assume that cable broadband is a disadvantaged technology even versus FTTH.”
The firm does not believe 5G fixed wireless will be a material help for telcos and other ISPs, which might account for the more-robust estimate of cable market share. Of course, others believe fixed wireless could eventually get 15 percent market share. That is more than enough share shift to upset MoffettNathanson projections, assuming the bulk of that share is gained by ISPs other than cable.
The other sensitivity is a significant further shift to mobile-only access, which in an era of unlimited usage plans and 5G speeds might prove attractive to a significant percentage of customers.
MoffettNathanson believes Altice USA and Cable One are in position to keep growing their internet access market share, in large part because they will not face a big telco with fiber-to-home assets.
AT&T competes in 42 percent of Altice’s network footprint, for example. AT&T competes with Comcast across just 34 percent of Comcast’s footprint; 30 percent of Charter’s network and only eight percent of and Cable One’s coverage.
The Altice Suddenlink assets are where MoffettNathanson expects Altice to keep taking market share.
Moffett sees Comcast’s long-term share potential at 60 percent, with telcos and others getting the balance. Charter’s likely share limit is 61 percent. Altice USA will peak at 60 percent, but ub the former Suddenlink areas, market share could reach 72 percent share.
That will not be true where Altice competes against Verizon’s FiOS network. There, Altice might peak at 53 percent.
